Issuance of the 2007 evidence treasury bonds (second phase) will start on April 1. A total amount of RMB50 billion will be sold nationwide, including RMB35 billion of three-year term and RMB15 billion of five-year term, with the annual interest rate being 3.66% and 4.08% respectively. CCB will underwrite RMB8.1 billion worth bond from April 1 to 30, with the ratio of three-year to five-year at 7 to 3.

The face interest rate of the three-year and five-year evidence treasury bonds is 0.3 and 0.33 percentage points lower than the interest rate of time deposit with the same term respectively. However, the real return of the bonds is still higher than that of time deposit with the same term thanks to tax exemption (see next table).

Real return of the 2007 Evidence Treasury Bonds (Second-phase) and Deposits with the Same Term

No.

Term

Time Deposit (lump-sum deposit)

Treasury Bond

Interest rate (%)

Real return of every RMB10,000

% of different terms

Real return of every RMB10,000

1

Three months

 1.98

 158.4

Without interest payment for a period of less than six months

2

Six months

 2.43

 194.4

 0.72

 72

3

One year

 2.79

 223.2

4

Between six months and two years

5

Two years

 3.33

 266.4

 2.43

 243

6

Between two and three years

7

Three years

 3.96

 316.8

 3.66

 366

8

Between three and four years

 3.69

 369

9

Between four and five years

 3.96

 396

10

Five years

 4.41

 352.8

 4.08

 408

Notes:

1. The real return of every RMB10,000 of three-year treasury bonds is RMB1,098 and the interest of RMB10,000 of deposit with the same term is RMB950.4. The former is RMB147.6 higher than the latter. The real return of every RMB10,000 of five-year treasury bonds is RMB2,040 and the interest of RMB10,000 of deposit with the same term is RMB1764. The former is RMB276 higher than the latter

2. 1‰ of the principal of the evidence treasury bonds will be charged for early redemption and interest is paid according to the interest rate predetermined for different terms.